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Corporate Finance Seminar Questions - Sources & Cost of Capital Q1 Equity Issue by Tender Studland plc. is in the process of raising new share capital via an issue by tender. It wishes to raise 7 million after costs, which are estimated to be 200,000. The directors of the company set a minimum tender price of 1.70 and the following applications have been received: Tender Price 2.10 2.00 Number of Shares Applied for 500,000 1,200,000 1,400,000 1,900,000 2,500,000 1.90 1.80 1.70 Required: a) The directors of the company wish to raise the required funds by issuing the minimum number of shares necessary. If they follow this course of action, what will be the strike price for the tender issue and how many shares will be issued? b) Mr Flash is a private investor who applied for 2,000 shares at 1.90 per share. Determine how many shares he will receive from the company and the price that he will have to pay for these shares. c) Cheapskate & Co is a firm of fund managers which applied for 1,500,000 shares at 1.70 per share. Determine how many shares it will receive from the company and the price that it will have to pay for these shares. Corporate Finance Seminar Questions - Sources & Cost of Capital Q1 Equity Issue by Tender Studland plc. is in the process of raising new share capital via an issue by tender. It wishes to raise 7 million after costs, which are estimated to be 200,000. The directors of the company set a minimum tender price of 1.70 and the following applications have been received: Tender Price 2.10 2.00 Number of Shares Applied for 500,000 1,200,000 1,400,000 1,900,000 2,500,000 1.90 1.80 1.70 Required: a) The directors of the company wish to raise the required funds by issuing the minimum number of shares necessary. If they follow this course of action, what will be the strike price for the tender issue and how many shares will be issued? b) Mr Flash is a private investor who applied for 2,000 shares at 1.90 per share. Determine how many shares he will receive from the company and the price that he will have to pay for these shares. c) Cheapskate & Co is a firm of fund managers which applied for 1,500,000 shares at 1.70 per share. Determine how many shares it will receive from the company and the price that it will have to pay for these shares